DENVER — A new audit of Denver's 16th Street Improvement Project found the renovation came in more than $27 million over budget, largely due to the discovery of a historic brick sewer system buried beneath the street — and that a key $18 million change order was approved without city council review.
The audit, released Thursday by Denver Auditor Timothy M. O'Brien, examined how the Department of Transportation & Infrastructure (DOTI) managed the project from planning through completion.
The renovation of 16th Street — which dropped the word "mall" from its name in 2025 — was years in the making. Denver City Council approved a $149 million construction contract with PCL Construction Services Inc. in March 2021, according to the audit.
By the time the project wrapped up in late 2025, the final cost had grown to about $175.6 million — nearly 18% more than planned. There were 11 change orders totaling $27.2 million.
"This cost increase is attributed to construction change orders during the project," said William McLaughlin, audit manager with the Denver Auditor's Office.
The largest of those was Change Order 3.
In May 2022, PCL workers uncovered part of Denver's historic brick sewer system beneath 16th Street.
"The cost and time were to address delays caused by complications involving the historic brick sewers," said Alexander Muñoz, senior auditor with the Denver Auditor's Office.
The result was an $18 million settlement and a 301-day extension to the project's completion date.
"So where's the screw up? The taxpayers are on the hook for this," said Jack Blumenthal, vice chair of the Denver Audit Committee.
The audit said those changes should have been made through a formal contract amendment — which would have required City Council approval.
But the audit also identified a structural problem: the city's standard specifications for construction general contract conditions, last updated in 2011, contains no mechanism to convert a change order into a contract amendment. Because the original contract already exceeded $500,000, the $18 million change order was not subject to city council review under the city's existing rules.
A spokesperson for the Department of Transportation and Infrastructure said in a statement that the department "followed all policy and legal requirements in executing the change order."
"What we're going to do is strengthen DOTI's capital project delivery governance and process moving forward. We are committed to that," said James Potter, DOTI's deputy manager.
For workers and business owners on 16th Street, the project's completion has been a welcome change.
"My managers were saying the business is really slow in comparison to where we normally are," Kennady MacDonald, a sales associate at Rocky Mountain Chocolate Factory on 16th Street, said of business during the construction.
MacDonald said the street feels different now.
"It does feel way more visible. It's been nice," MacDonald said.
Beth Stephens, a former business owner on 16th Street, said the construction years were difficult but the result was worth it.
"It definitely affected traffic," Stephens said. "I think what they did to the mall is beautiful."
According to the audit, council member Shontel Lewis, chair of the city council's transportation and infrastructure committee, told auditors the change order was significant and the department should have brought it to the committee's attention. Council member Chris Hinds, the committee's vice chair, said there is an expectation for the department to discuss cost overruns and project delays with the committee.
Council members Lewis and Hinds had not responded to requests for comment as of Thursday evening.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
Denver7 is committed to making a difference in our community by standing up for what's right, listening, lending a helping hand and following through on promises. See that work in action, in the videos above.
